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Canada climate-change hoax of the week

Economics, unlike science, is little more than a system of competing beliefs. So it's rather comical that you'd accept Gordon's preferred dogma as fact while simultaneously dismissing climate change science as nothing more than dogma.

What empirical evidence are you referring to? Climatologists are relying on models and massaged data they created themselves. Many climatologists are acting like they have something to hide so I think it is reasonable to assume they have something to hide.

they also use as their base much of the data that was "massaged" by Mann, Jones, Briffa et al. as they say Garbage in Garbage out. Kind of like your posts.

DPT on December 15, 2009 at 1:57 pm

"Climatologists are relying on models and massaged data they created themselves. Many climatologists are acting like they have something to hide so I think it is reasonable to assume they have something to hide. "

Not sure where you find any dogma in Gordon's analysis. He simply questioned one of the premises of the Pembina assertion that reducing our CO2 emissions would be economically painless. I find economics a pretty useless predictive science anyway, so I am never surprised when they get found out, but that is not the point of this post, is it?

Gordon relies on his preferred economic theories to make the claim that the Pembina Institute's assessment is incorrect. Undoubtedly other economists, who subscribe to a different set of economic theories, could be found that make the claim that the Pembina Institute's assessment is correct.

Except Prof. Gordon's criticism isn't based on any 'theory' at all. Rather he's stating that they forgot to account for something (arguably) rather major.

Now if Pembina has a theory on why they need not consider international capital flows, then you'd have a point. But as it's drawn up right now it looks like a massive oversight. And that's a *best* case scenario.

What is hard for some people to do is separate out the various parts of an argument so that it can be debated intelligently. Gordon's analysis is similar to McIntyres, inasmuch as he seeks to understand and question the premises of the argument presented, review its data and test the conclusion against both.

His actual beliefs are irrelevant to the argument that he is presenting. McClelland has trouble with this.

I

Bill Simpson on December 15, 2009 at 12:35 pm

Let me try putting it a different way, Mike.

The Pembina Institute released a study on the habitat range of the Sasquatch. Then along came Jack "what conclusions would you like me to reach" Mintz and Stephen "theories always trump reality" Gordon claiming the Pembina study is bull because they failed to account for the Sasquatch's dietary requirements.

What nobody has taken into account is that the economic theories that underwrite all of this are as bogus as Sasquatch.

How can you argue it is rather major without quantifying it? See my q's near the end of Gordon's piece.

Dot on December 15, 2009 at 1:28 pm

Unless Pembina is going to let us access their model, it's impossible to say, exactly, how important it's going to be (in terms of magnitude). But it's a really obvious variable that needs to be included. In fact, it's probably the *most* important variable and it's left out of the discussion entirely!

Here's why I have difficulty with the original criticism – other economists claim it's theoretically wrong, but can't say it's material wrong. Can you give me some examples of industries, currently productive in Canada (recipients of their forecast investment) that will locate to India and China SOLELY because Canada/NA has a carbon tax/cap and trade and they don't?

Or are we just talking about $12-$15 billion on a, what, $2 trillion economy in 2020?

Dot on December 15, 2009 at 5:18 pm

I can't give you the name of a single person in Bangladesh that would die if worldwide temperatures rose 4 degrees, but that doesn't make it any less of a concern.

It's not a matter of being 'theoretically' wrong, Dot, it's one of the major worries about the negative effect any attempts at reducing CO2 is going to have to the economy. The authors of the study are assuming the major question away. It's like disproving the theory of evolution by first assuming that the earth is 6000 years old.

Despite your and McClelland's objections, there isn't a single serious economist in Canada who sees this as a worthwhile assumption, including the folks at progressive-economics.ca.

Dr. Mark Kenneth Jaccard (born April 12, 1955 in Vancouver, British Columbia) is a professor of environmental economics in the School of Resource and Environmental Management (REM) at Simon Fraser University, Vancouver, Canada.

Education

* Ph.D.: University of Grenoble, Department of Economics / Institute of Energy Economics and Policy, 1987.

Well, given that it's his work, and his name is on the cover, and that the onus of proof is on you who made the statement, I'm comfortable with my assumptions. Are you?

btw, since Jaccard teaches at SFU, Mintz is at U of C, you are at UWO part time, and Gordon is at Laval, this looks to me like an economics internal turf war, or factional battle. Perhaps had the Stelmach task force looking into these matters hired some economists (as others had beefed about in the past), all might be more quiet on the Western Canada front.

Dot on December 15, 2009 at 6:13 pm

All models have simplifying assumptions, in both the social sciences and the natural sciences. The art of modeling is to include assumptions that do not overly alter the underlying dynamics of what is going on. As such, economists put in assumptions they're uncomfortable with quite often – usually because they have to (typically because if they don't, it's because the math doesn't work without the assumption). Using a static model to estimate tax changes ten years out is a whopper. I would bet dollars-to-donuts that there is no way Jaccard would be able to publish this in a peer-reviewed journal. Fortunately for him, he's not trying to.

"Since Jaccard teaches at SFU, Mintz is at U of C, you are at UWO part time, and Gordon is at Laval, this looks to me like an economics internal turf war, or factional battle."

LOL – yeah, that well known Ivey-to-Laval-to-Calgary Axis. If there is a 'internal turf war' here (which, there isn't), it would be a methodological one. Economists have methodological debates all the time. Science isn't conducted by majority rule, but that being said, given that every single economist who has spoken publicly about this assumption has spoken out against it, and the economist who used it hasn't commented, should indicate something.

It seems to me Jaccard was a member or did modelling also for the NRTEE. I think his modelling was the basis for suggesting the current gov'ts policies (whatever they might be) would be inadequate to meet its target goals for 2020.http://www.canadian-universities.net/News/Press-R…

Do you know if Jaccard also used similar assumptions when he did the modelling for the NRTEE? If so, were the same criticisms of his model assumptions made at that time, or was he using different ones? If not, why not? I presume his work there was the basis for this latest engagement.

No, I wouldn't call it an everyone hates SFU turfwar, more of I hate the guy making all of this consulting money turfwar.

Dot on December 15, 2009 at 7:14 pm

"Do you know if Jaccard also used similar assumptions when he did the modelling for the NRTEE? If so, were the same criticisms of his model assumptions made at that time, or was he using different ones? If not, why not?"

I honestly don't know what assumptions he was using then or if they were criticized.

"No, I wouldn't call it an everyone hates SFU turfwar, more of I hate the guy making all of this consulting money turfwar. "

LOL… hahahahah. That must be it – we're all jealous of those huge grants the Pembina institute is famous for handing out.

If you were going to go the 'follow the money' route, you should have gone with the 'you're all being paid off by the oil industry' card. It's not true, but it's a hell of a lot more believable.

If you were going to go the 'follow the money' route try considering the source of the funding TD Bank. Yes, they are notoriously cheap – that's why they show up annually at Ivey recruiting in their multiple stretch limos.

Oh, and you forgot another FP critic and University economics prof – one of Coby's favourites: Ross McKitrick of Guelph. Here's what he wrote Nov 3rd, before all of the piling on:

The cost estimates were done by Mark Jaccard's team in Burnaby, B.C. The technical report is a serious piece of work that tries to put some numbers onto far-reaching energy policy shocks. Although I have reservations about their modeling work and their cost estimates, they deserve credit for trying. It is astonishing and unacceptable that there has been nothing on this subject from Ottawa. Why do we even have a Department of Finance anymore? There should have been detailed cost estimates long before now. Instead we are sleepwalking into some of the most disruptive and costly energy policy misadventures since the National Energy Plan of the 1970s without the Conservatives having published a single estimate of the economic consequences.

Perhaps his target is the proper one – the fed gov't for not supplying anything. It's very easy to criticize, I've found . Hence why I asked S. Gordon for a more appropriate report if we should discount this one, as he suggests. Not surprising, no reply from anyone. That speaks more to me than some questionable assumptions that may/may not be significant.

Dot on December 15, 2009 at 8:27 pm

"Hence why I asked S. Gordon for a more appropriate report if we should discount this one, as he suggests. Not surprising, no reply from anyone."

What are you talking about? We've been discussing this for some time. At any rate, the existence or non-existence of other reports does not change the rather large methodological flaws with this one. That's the sole issue here. Not who is funding the thing. Not what other studies there are. Not what schools we belong to. Not the size of our paycheques. Not whatever artificial issue you'll introduce next.

Anyhow, agreed – this *is* the kind of thing the Feds should be doing. But they're not. A number of us, including Prof. Gordon have been calling for an increase in the PBO's budget precisely so they can do these sorts of studies!

Also agreed with McKitrick – they deserve credit for trying however there's some questionable modeling assumptions. So, in essence, we're all in agreement!

That's a very strange assumption. Particularly since, if they wanted to, they could assume carbon tax revenue is used to finance reductions in the corporate income tax and make a reasonable argument that this would increase capital flows into Canada. Then again, I couldn't imagine the Pembina institute calling for corporate income tax cuts.

Just for the record, I believe they were supportive of the Liberal or Green party plans in the last campaign both of which included a carbon tax shift, including reductions in corporate taxes.

Dot on December 16, 2009 at 2:07 am

Ahh.. right.. I mentioned them *60* hours ago on a completely different blog. Some obsession.

The Canada West Foundation, a very partisan western based think tank releases a critique of the TD bank – Jaccard study on Dec 10th.

That very same day, Jack Mintz from the School of Public Policy, University of calgary, publishes an op-ed in the National Post, picked up and quoted by Stephen Gordon in his blog. The Mintz op-ed repeats the CanadaWest Foundation criticisms.

Also, on that very same day, Dec 10th, uber partisan CAPP shill columnist Deborah Yedlin of the Calgary Herald repeats unfiltered, and embellished, a column piece reminding Pembian that it gets a significant amount of funding from oil interests, and also wonders if TD banks outlooks suddenly look less "Wild Rosie". Of course, Ms Yedlin assumes readers know she is married to a very significant oil analyst at a very significant Investment bank.

It's easy to see how one might be inclined to associate Pembina incorrectly, given the "spontaneous" media coverage.

Dot on December 16, 2009 at 12:41 am

Theoretical models, unlike science, are completely dependent on inputs from humans, regardless of whether they are climate models or economic models. Bias from the humans will determine the outcome.

'twould appear to me that Pembina/Suzuki are retracting some of their statements because they've based a model on faulty assumptions. They may yet be able to prove that "going green" would have a negligible long-term impact on the economy, it would just be foolish to so proclaim based on a model that assumes consistent inputs and no foreign change in circumstance.

"Did you know that huge forest fire in BC last year spewed out more ghg's than the oil sands spew in a year… "

So let's continue down a road that leads to more forest fires, more pine bettle infestations! You're a genius Wilson. Stop pretending there will be no downside to not taking remedial CC action of some sort…there's always a price to pay somewhere. The key surely is to figure out a sensible balance between economic and environmental costs. Hands off our oil wont get it done.

''The Liberal government of Ontario extracted a pledge from the feds not to include emissions from automakers in the national caps required to meet our Kyoto commitments,
and to put a larger burden on energy-producing provinces such as Alberta and Saskatchewan''

It's time to put this silly gripe to rest. Ontarians have been carrying this nation on their backs since confederation but we aren't griping about it like children. In fact, it's become a source of embarrassment that Ontario is no longer doing more than their share.

True…i just wish ABs could adopt a little more of this attitude…we're proud to help carry Canada on our backs. Instead they've had pols like Klein and folks like Wilson taking whinging resentment to an art form…" let those eastern bastards freeze in the dark"!
To be fair to AB it still hasn't yet scaled the heights of shamelessness politicking on national unity that Quebec long ago set out to claim as its very own.

There was other mining and the cattle industry in Alberta long before the oil boom. I don't think it was ever a have-not.

I seem to recall from my government finance class that Alberta declined from taking part in equalization.

Primary resource extraction isn't as big a part of Alberta and Saskatchewan's economy as most people think. It's important, but not the whole picture. We have a lot of primary and tertiary industries, but not a lot of the secondary sector / manufacturing jobs that have been bleeding out of Ontario & Quebec to China & Mexico.

YSP on December 15, 2009 at 5:58 pm

i'm no expert on equalization, but i'm pretty sure Ab was a recipent…can't say for how long though.

kcm on December 16, 2009 at 2:07 am

What are you going to do about it? A couple of landlocked provinces, threatening the separate? Have fun exporting your oil without paying duties that make a carbon tax seem like a holiday.

Yes, but Gore assured us that global warming will raise the oceans by at least 20 ft and we all know the oilsands is the main driver of the world's CO2 pollution. So I predict (with 90% confidence) that if Alberta and Sask separate and then rapidly ramp up development of the oilsands, we can probably have our own coast in about 20 years. I suppose we could reconsider ….if you give us billions in aid money. So pay up or Vancouver sleeps with the fishes.

See, the new nation of AlSask could use the same argument the developing world is using in Copenhagen – pay us not to develop, or else. BTW,I have computer models to prove all of these scenarios, just don't ask for raw data because all I kept is the value added, homogenized, blended and truncated data.

Unless you plan to tunnel through the centre of the earth, Alberta and Saskatchewan oil would have to go through either Canada or the USA for export. Should be a simple matter to slap import tariffs in those two jurisdictions on oil and gas from these two locations.

The gateway pipeline through BC you mean? The one that AB today, and certainly not an independant AB,may not get through, once BCers fully realize the environmental risk they are assuming with tanker traffic on the coast – for AB's principle benefit. Notwithstanding the efforts of Harper,Campbell and Enbridge to disregard a Trudeau era moratorium on coastal tanker traffic…not a vote winner in much of BC.

50% of non-renewable resources are now included in equalization calculations. It's renewable energy like Quebec hydro that are completely excluded from equalization. So if you're looking for equalization fairness, cast you evil eye on la belle province.

You know — you're right. A guy who can casually toss off references to obscure Dungeons & Dragons rules, the way Colby Cosh can, should have seen it and called it for what it was — not a hoax, but rather a fantasy.

The Liberal government of Ontario extracted a pledge from the feds not to include emissions from automakers in the national caps required to meet our Kyoto commitments,
and to put a larger burden on energy-producing provinces such as Alberta and Saskatchewan

Alberta's contribution to Confederation is already three times higher than Ontario's on a per capita basis

And.. your point? We're blessed with an abundance of dead dinosaurs. Let's not fool ourselves, before that discovery, we were on the receiving end. That discovery had nothing to do with us, it was happenstance. If you don't think we should share that wealth with the rest of Canada, I don't think you should call yourself Canadian.

Hell, and they say the Bloc are separatists.. at least they're honest about it.

Wilson's collective memory along with many AB's only really begins at the start of the oil boom…or better yet at the start of the NEP. Poor dear, she can't help it really. Forty years of one way indoctrination does take its toll.

Indeed. Alberta and Saskatchewan won the geologic lottery. They have hundreds of billions of dollars in wealth just waiting to be dug up or pumped out. I don’t think it is readily comparable to Ontario, which doesn’t have any significant money pumps (there are some mineral resources in Northern Ontario… other than that, what, Niagara Falls?).

12 million people. Education. Finance. Proximity to a hundred million customers. Direct flights to 100 cities. But it's not like we produce more GDP than our population share while being underrepresented politically or anything…

And use those taxes to give all public servants a 50% raise! Because these patriotic citizens will then pay taxes on it! What a virtuous circle! Why it's so good we should make every citizen a public servant and give them all raises. Oh happy day…

1 and 3 are industries that provide the fuel driving C02 emissions.
2 and 5 are industries that produce products that emit large amounts of C02
4 and 7-9 are also energy intensive industries that ravage the landscape
6 is an industry that relies on the killing of trees

Yeah, we are going to get SOOO rich by decimating our core industries.

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